Bank of America Corp. is in talks to pay at least $12 billion to settle probes by the Justice Department and a number of states into the bank’s alleged handling of shoddy mortgages, according to people familiar with the negotiations.
At least $5 billion of that amount is expected to go toward consumer relief, consisting of help for homeowners in reducing principal amounts, reducing monthly payments, and paying for blight removal in struggling neighborhoods, these people said.
The North Carolina bank’s total tab to end government probes and lawsuits related to its precrisis conduct is increasingly likely to surpass the record $13 billion J.P. Morgan Chase & Co. JPM + 0.60% paid last year to settle similar allegations, these people said.
Bank of America has already struck a $6 billion settlement, by the Justice Department’s measure, with the Federal Housing Finance Agency.
